Gaza Strip/Economy

Economy - overview:
Economic conditions in the Gaza Strip - under the responsibility of the Palestinian Authority since the Cairo Agreement of May 1994 - have deteriorated since the early 1990s. Real per capita GDP for the West Bank and Gaza Strip (WBGS) declined 36% between 1992 and 1996 owing to the combined effect of falling aggregate incomes and robust population growth. The downturn in economic activity was largely the result of Israeli closure policies - the imposition of generalized border closures in response to security incidents in Israel - which disrupted previously established labor and commodity market relationships between Israel and the WBGS. The most serious negative social effect of this downturn has been the emergence of chronic unemployment; average unemployment rates in the WBGS during the 1980s were generally under 5%; by the mid-1990s this level had risen to over 20%. Since 1997 Israel's use of comprehensive closures has decreased and, in 1998, Israel implemented new policies to reduce the impact of closures and other security procedures on the movement of Palestinian goods and labor. In October 1999, Israel permitted the opening of a safe passage between the Gaza Strip and the West Bank in accordance with the 1995 Interim Agreement. These changes to the conduct of economic activity have fueled a moderate economic recovery in 1998-99.

Industries:
generally small family businesses that produce textiles, soap, olive-wood carvings, and mother-of-pearl souvenirs; the Israelis have established some small-scale modern industries in an industrial center